There is a big problem with the defnition of the BTC price, as there is an implicit agreement that it is determined by the largest centralized exchanges e.g Binance, Bitfinex, Bitstamp etc. We are guilty of using those references to price this new asset, and by doing that we are negating the very decentralized nature of it. Every time I try to find the price of BTC in my local currency, it is always referenced to $BTCUSD from those exchanges and then multiplied by USDXXX (national shitcoin currency ticker).
It is time that we set our own patterns and we reference to ourselves, this might seem like a trivial step, but it says a lot about what we believe about it. It is time that we use Bisq, or Robosats or hodlhodl or some truly open and decentralized platform to set the BTC price. The fact that many people still keep their sats on centralized platforms partly obeys to the same logic: that's where the price discovery happens.
With time BTC itself will be the reference to other assets, but that's a topic for another post.
10 sats \ 0 replies \ @jeff 30 May 2022
I think this is a very interesting data engineering, governance, legal and economic problem combined into one. But its probably going to be a thankless job.
Add in considerations such as...
- Private contracts marking something to market, then using BTC, for future payments, require both parties agreeing on price feed (Exchanges listed) and methodology (Eg. "last tick", "VWAP of trailing X amount of time", "midpoint of bid-ask spread", etc.).
- The futures markets include a premium/discount, such as counterparty risk, that isn't relevant to every deal, but the aggregate probably has signal worth considering.
I was mulling what would be the cheapest way to host a pseudo-decentralized reference rate that had an idempotent methodology such that if anybody had the same deployment/infra, it would spit out the same number at the same time.
I say pseudo-decentralized, for lack of a better word. Not sure how to frame a "centralized set of input feeds" + "calculated by a federated army of reliable altruistic data-engineers".
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0 sats \ 0 replies \ @purpurato OP 31 May 2022
I guess the problem is that most people still trade at centralized exchanges, so they are the ones determining the price. Part of my beef is that we don't know anything about what's going on inside those platforms, most surely many bitcoins aren't even there and we're waiting for the collapse of one of the big ones in order to see a REAL price. What @jeff says is pretty interesting, I wonder if it's worth the effort.
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0 sats \ 0 replies \ @zuspotirko 30 May 2022
I got to disagree with you a little bit here.
Bitcoin is a decentralized world. The entries to this world are mining or exchanges or working for Bitcoin etc. We never claimed to make these entries into this world decentralized. But Bitcoins does it best to do so: small packages per protocol, tor integration everywhere and a big welcoming community that is working hard to lower and lower the barrier to entry.
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