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mircea_popescu: (the exact way is left as an exercise to the user, seeing how depending on how you do it you get diff results)
mircea_popescu: why can't he participate in the chan like normal human beings.
mircea_popescu: kakobrekla what's it like there ? i can't make sense of all the bs i'm reading.
mircea_popescu: i guess btc is still very much a contrarian market. whatever the public consensus is, it's prolly wrong.
mircea_popescu: it's moot practically as they're not listed, but since we're discussing theory.
mircea_popescu: so maybe the best play is a weighted binary portofolio, bonds and mtgox shares
mircea_popescu: MPOE bonds make money on calm fx market, lose money on volatility.
mircea_popescu: thestrin1puller thinking more about your question : it would seem to me there is some relation here:
mircea_popescu: actually... this is interesting. from a purely fiat perspective mpoe bonds may be one of the best btc-investments you can make.
mircea_popescu: jurov that is a point, in fiat terms the bondholders made money :D
mircea_popescu: if you have 105 btc and put 100 btc into mpoe bonds expect a wild ride.
mircea_popescu: to hedge you would need things which for good reason move in opposing directions.
mircea_popescu: bitesak lol considering the state of finances everywhere in europe vs romania... that's not quite so far off.
mircea_popescu: now "people" are confronted with the rude awakening of reality. kinda bound to be a little thrashing about.
mircea_popescu: "people" have been busily ignoring it for the past year or two
mircea_popescu: thestrin1puller ya well, the thing is this : mpoe and mpex are VERY complex, well thought out intricately designed gems.
mircea_popescu: it's a romanian-based llc (srl in romanian) that i own ~99% of
mircea_popescu: thestrin1puller no. i paid twennyfive dollars for a girls pair of stockings out of pocket yesterday.
mircea_popescu: poor guy lol. one day he's claiming market success like what... 99% of all internet ppl in financial rooms
mircea_popescu: bitesak i'd normally say my pleasure... but this month was a little rough.
mircea_popescu: the moment i go in the market to hedge i'm basically releasing all the risk out there. this isn't waht mpoe does. mpoe just soaks up the risk.
mircea_popescu: but the 1st level providers don't buy it, cause there's nobody to buy it from
mircea_popescu: or if you prefer the example of the internet : second, third and higher tier providers BUY bandwidth.
mircea_popescu: i'm not trading volatility, i'm actually providing the hedge endpoint.
mircea_popescu: the alternative would be to simply re-buy insurance somewhere else. but this isn't underwriting, this is simply trading.
mircea_popescu: the only way to actually underwrite this is to have a lot of money, sign insurance policies with the farmers.
mircea_popescu: it would be beneficial for them to buy flood insurance.
mircea_popescu: benkay take the insurance example, because it is really very apt.
mircea_popescu: this is what it does. if i go buy safety somewhere else then i'm no longer PROVIDING it
mircea_popescu: okay. the bot itself is a primary seller of safety in btc.
mircea_popescu: mpex does offer stocks, but that's not under discussion here. as for the derivative trade, ie options, these are a different market from the underlying.
mircea_popescu: the operator would offer very high margin and trade with low net worth parties who couldn't participate in the real marketsd.
mircea_popescu: a bucket shop is a currently illegal, historically popular venue to take side bets on stocks.
mircea_popescu: but anyway : mpoe can't hedge. what it does is it allows others to hedge against it.