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I think many were taking the gamble. What ended up happening is that a bunch of vendors who did not take the hedging canceled the orders. Since hedging doesn't
by eof 14y ago
I think many were taking the gamble. What ended up happening is that a bunch of vendors who did not take the hedging canceled the orders. Since hedging doesn't protect buyers, the buyers just get their original btc back; this made a lot of people upset and their are multiple threads on reddit and the silk road forums calling out these vendors who essentially cheated the escrow/hedging system.
I wonder if it will have an effect with buyers demanding hedging as well.
- dmix 14y ago> I think many were taking the gamble The article says many didn't take the gamble: > As a result, only about 1,000 sales listings out of more than 11,000 were taken off the site during the crash, according to DPR. “Those were from vendors who didn’t protect themselves,” he (or she) says. “The volatility only hurts vendors who don’t hedge their escrow balance.”
- corin_ 14y agoDid the 10,000 take the protection, or did some of them gamble, but chose to honour they sales (and/or had already shipped product with funds still in escrow before the price dropped)?
- makomk 14y agoI think the seller using hedging does insulate buyers from changes in the Bitcoin price if they get refunded. If Silk Road didn't do things that way, it'd be possible for a malicious colluding buyer and seller to profit from Bitcoin's instability at the expense of the Silk Road's operator. There were a lot of complaints on the Silk Road forums about cancelled orders though, and sellers saying they took a loss in order not to cancel.