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?
it's just hedging on the future DEMAND for bitcoin. So as long as I have the ability to temporarily trade the coins that I borrow, then I can profit from depreciation.
ex.
MONDAY: 1 BTC is trading for 100 USD. I BORROW 20 BTC and agree to PAY BACK 21 BTC on FRIDAY. I then SELL the BTC for 2000 USD.
TUES: 1 BTC is trading for 90 USD.
WED: 1 BTC is trading for 80 USD.
THUR: 1 BTC is trading for 70 USD.
FRI: LOAN DUE! I buy 21 BTC for 1470 USD. pay back my creditors.
530 USD PROFIT.
it's not possible to implement a credit system directly in the block chain.the only reason why no one is doing this is because there are no good credit systems for BTC. I think though that you could use the ones that are out there if you're really good at math and economics. To my knowledge they are not set against the current market rates.