Quote from: dooglus on September 04, 2012, 05:30:14 PM

Quote from: dooglus on September 03, 2012, 03:06:30 PM

I see two cases, X and Y:

(X): If we pay out using the old $1/BTC price, total debt = $1 + $1 = $2, we pay out 50%.
A gets 0.5 BTC = $5 and B get 0.5 BTC.

(Y): If we pay out using the new$10/BTC price, total debt = $1 + $10 = $11, we pay out 90.9%.
A gets 0.091 BTC = $0.90, B gets 0.909 BTC.

In X, where we use the old price, the dollar holders end up with more than they were owed, while the BTC holders end up with less.
In Y, using the new higher price, everyone gets the same fraction of what they were owed.

Y looks like the fairer case to me. What does anyone else think? Can someone make a case for dollar holders to be making a profit on the dollars they were holding when the price of BTC goes up? Maybe I'm missing something.

I was in a hurry yesterday when I posted. There are more options, including the one Seal proposed. He suggested converting BTC into AUD at the current price, but allocating it to creditors at the old price. Let's call that option Z.

In Z, we sell the 1 BTC for the new price of $10, but use the old price to calculate the total debt ($1 + $1 = $2). So we can pay everyone out 500% of what they're owed: A gets $5 and B gets $5. Actually that seems to be exactly the same as (X) above, except that everyone is paid out in dollars, not bitcoins.

From a practical point of view, I'd rather pay out in bitcoins. Then I don't have to work out how to make international bank transfers, etc. Paying Bitcoins is much easier.

Apologies dooglus, I think I may have confused you with an earlier suggestion in an older post (which i see now is heavily biased towards option X). Let me re-explain my option z which should take the middleground of X and Y:

Quote

(X): If we pay out using the old $1/BTC price, total debt = $1 + $1 = $2, we pay out 50%.
A gets 0.5 BTC = $5 and B get 0.5 BTC.

(Y): If we pay out using the new$10/BTC price, total debt = $1 + $10 = $11, we pay out 90.9%.
A gets 0.091 BTC = $0.90, B gets 0.909 BTC.

(Z): Pay out using an averaged price of the old price and current ($1+$10)/2 = $5.5/BTC, total debt = $1 + $5.5 = $6.5, A gets 0.154 BTC, B gets 0.846 BTC.

Fairer?

p.s. Agreed, paying back using BTC makes sense.