Post
Topic
Board Bitcoin Discussion
Re: Silk road
by
DonnyCMU
on 28/09/2011, 01:57:58 UTC
They also have a hedging feature, so if you want to sell something, and don't want the hassle of shifts in the value of btc:usd exchange, you can hedge your account in USD so if btc price rises, you have less btc but same USD, and likewise, if price reduces, you have more btc but same USD value.

Interesting... So.. the site holds a balance, in bitcoins, for each buyer, and if the buyer hedge his account and..... how does it work? The SR automatically do the trading? Trade against who? How did the user get more btc if the price drop?

you upload a balance, people name their prices, you pay. many will ask you release the funds early due to the deflation.

I meant how do they do the hedging to keep keep the account value in USD the same after you upload some bitcoins. This could be useful in other scenarios where user don't want to deal with the swing in bitcoin prices.