Quote from: bluemeanie1 on June 07, 2013, 06:59:52 PM

Greetings Bitcoin People.

There has been much talk in the threads about Bitcoin Especially ways to hedge the future price of bitcoin. For non-Finance types, this means ways to place a bet(hedge) on the projected future price of Bitcoin.

On the projected future price of bitcoin against what?
Hedges, puts, calls, traded options are all relative to something, it is difficult to see how you could use the blockchain for this type of financial speculation
I might want to place a bet on the future price of bitcoin against the US dollar, the blockchain gives me very little information on the current exchange rate with the US dollar

OK I pay a $5 fee to have the option to buy $100 for 1 BTC at anytime in the next two months.
If the exchange rate stays at about $100 for 1BTC it isn't worth using my option. I lose $5.
If the exchange rate drops to $50 for 1BTC then I can use my option and buy $100 for 1BTC and then, immediately, I exchange the $100 for 2BTC. Welcome to the wonderful world of financial speculation (gambling).

The hypocrisy of bitcoin is that it decries the centralised banking systems then emulates the worst facets of those systems. I see that most of the bitcoin exchanges are mostly concerned with introducing leverage and derivatives that have no benefit to anybody except those who wish to exploit gamblers (i.e. it benefits the exchanges)

There used to be a benefit to futures and commodity trading to farmers who might wish to insure against bad weather or crop failure. This system has become corrupted. The people who should be taking options on exchange rate as insurance might be exporters who are actually manufacturing something. Not just gamblers who will continue to be exploited by the exchanges (trading platforms) in the same way that casinos make their money.