[Steem talk] Futures vs Commodities

in #steem5 years ago

First of all, this has nothing to do with the recent hoohaa of a crypto game that decided to move from one chain to another without proper information escalation resulting in vast majority of users upset about the decision being made. Again, nothing concern that game at all.

DRUGS

Let's learn localized English. According to Wikipedia:

A pharmacy (also called "drugstore" in American English or "community pharmacy" or "chemist's" in Commonwealth English) is a retail shop which provides prescription drugs, among other products.
Source - Wikipedia

This is why, drug is not drug's drug. It's medicine. If we were to build a drug factory, meaning to say we are actually making medicines to help people.

FUTURES

Let's talk about one of our possible futures. According to Wikipedia:

A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. These types of contracts fall into the category of derivatives.
Source - Wikipedia

Meaning to said, if we have some merchant or product wanted to execute a possible trade at an agreed price, and we are going to do it in the future for some reasons that both parties agreed to, we place a contract and bind the purchase at the agreed value. Between the execution, there is risk of loss of value because the contract has been bind earlier. If the product devalue before expiry, buyer loss. If product increase value before expiry, seller loss possible earnings.

Option

I don't want to paste another paragraph from Wiki anymore. Please go ahead and do the research by yourself. Today, I'm not teaching trading! I am talking about what are the possibilities could happen in the future.

  1. Drug is not a tradeable commodity due to the risk of liability. You can't keep medicines and hope for price fluctuation and magically someone would bind a contract with you.

  2. Instead, one can buy a share of a drug manufacturer. By way of option? Future? Spot trading? Name it, someone will sell you share.

Issues

Here's a problem, matter of fact, many problem arise.

  1. When you can use Steem to buy a drug manufacturer, so the factory can produce drugs for you to sell for cash(in this case, Steem). And suddenly, the authority who run this system set a new rule, the official currency for drug dealing is no longer Steem. What would you, as an "investor" will react?

  2. Another big problem, assuming you don't want your drug factory anymore because the drugs it produces can't be sell as Steem anymore. The authority did not set a rule for exit strategy. You invested into this drug factory, they don't care how much or how long. Now you can't sell the share of your own company. You're expected to continuously run these factory and produce. The quality of your drugs may maintain, but the price is not guaranteed due to the official currency is a digital contract with the future exchange. Bear in mind, there is no dollar value to these contract yet.

  3. The authority promised, those future contracts you sold drugs for, will still worth Steem. But the authority also admitted they have PREprinted those contracts for themselves. Amount, unknown. They also promised to give out free contracts with way of "air drop". You, as a drug factory owner, originally a ton of drugs would originally worth 50000$, now the authority allow you to sell the same amount of drugs for 5000000000Future contracts. But they did not spell out how many contracts available in the market, neither the price per contract against it's base currency Steem.

A game is not an investment. So let's talk about investment. Again I would like to emphasize, this piece has absolutely nothing to do with the recent hit list of a game. But, I'd like to know what would you do, if you own a huge drug production factory, and given the situation now the authority no longer allow you to receive payment in the currency you preferred, and you can't sell off the factory. 😂

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Alright thanks

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Thanks a lot

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唱了,不参赛了🙂

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